BSP grants two more virtual currency exchange licenses

Bangko Sentral ng Pilipinas (BSP) reportedly issued two more licenses for virtual currency (VC) exchanges, Business World reported July 6.

BSP approved three more applications five months since the issuance of Circular No. 944 dated 6 February 2017, where it is stipulated that VC exchanges or businesses engaging in the exchange of pesos to virtual currency or vice versa are required to register with the BSP as remittance and transfer companies.

The deputy governor of BSP, Chuchi G. Fonacier, reportedly said Virtual Currency Philippines, Inc. and ETranss are now legal platforms that can convert pesos into VC like bitcoin and ethereum.

Two months prior to this, BSP also granted Bloom Solutions with a certificate of registration to operate an exchange in the country. Aside from the three companies mentioned above, the first two companies accredited with BSP license for VC exchange are Rebittance, Inc., a subsidiary of SCI Ventures that operates Rebit, BuyBitcoin, and bitbit; and Betur, Inc., also known as coins.ph.

BSP has initially considered whether VC exchanges should secure separate licenses such as e-money issuers (EMI) due to the fact that these companies are providing e-wallets services for their clients. However, Fonacier admitted that internal consultations advised against this in light of making the registration process simple for these new market players.”

She further stated:

“Now, we are refining the rules… If your business model has a portion making use of e-wallet, then there’s an additional requirement but not necessarily or automatically an e-money license.”

In view of this, VC exchanges that have been granted with a license are required to comply with regulations to safeguard consumer’s identity, provide adequate security against anti-money laundering, terrorist financing, information technology risks, and other financial stability concerns. Despite this, the local central bank still does not intend to endorse any VCs as it is not backed by any commodity.

The government also announced earlier in May during “A New Venture in the Valley Unfolds: CEZA Fintech Summit 2018” that 21 offshore blockchain companies have already signed up to operate in the CEZ (Cagayan Economic Zone). In return for tax breaks, these companies are expected to generate employment in the country and expected to bring in at least P2 billion in fresh investments in the next two years.